Tuesday, 2 April 2013

Osborne goes on the offensive..

Good morning. Nine out of ten households prefer benefit reform. That will be George Osborne's message today in a speech which will defend the tax and allowance changes which came into effect yesterday. As we report, George will train his fire on those who "always complain with depressingly predictable outrage" (both the Guardian and Mirrorhelpfully chipped in yesterday with suitably apocalyptic front pages), adding that "defending every line of welfare spending isn't credible in the current economic environment." In arguing for the changes, Mr Osborne will cite Treasury figures showing that a working couple with two children will be more than £400 better off each year, while most households will benefit to some degree. Helpfully, the British Chamber of Commerce have given George some covering fire - they say that Britain is out of recession, will avoid a triple-dip, and that the weak pound is starting to provide a boost to exports.

As Patrick Wintour points out in the Guardian, the Chancellor is convinced that "making work pay" is not just good economics, but good politics too. Labour's defence of those reliant on state benefits may play well in its heartlands, but will have little resonance in a hard-pushed middle England. The Labour response so far has concentrated on seeking to contrast benefits cut with the cut to the very top rate of income tax coming into effect, but it's a strategy that hasn't gained traction in any of its appearances to date. Worse still, it leaves Labour arguing the case for a moral equivalence between cuts to taxes and benefits, a dangerous path at a time when the Coalition's policy on raising the tax threshold is polling strongly.

It would be a different story if the minimum wage were cut. As we report, that's now a possibility, in real terms at least. The Low Pay Commission, which sets the minimum wage, must now consider its impact on "employment and the economy" before agreeing future increases, a result of changes being made to its terms of reference. No matter how low the minimum wage goes, however, chances are Iain Duncan Smith could live on it. The intrepid Work and Pensions Secretary told the BBC yesterday that he could get by on £53 a week if need be. As Dan Hannan writes in the Mail, the degree of outrage faced by IDS and friends does not tally with the relatively modest extent of the changes to working age benefits:

"Do you suppose that increasing benefits by 2.2 per cent, as Labour had planned, rather than by one per cent, would tackle these underlying problems? Surely the real measure of a successful welfare policy is that bills fall as poverty is reduced...A Conservative approach is being tried, and not before time. The alleviation of poverty is altogether too important to be left to the Left."

WE'RE ON THE ROAD TO NEWPORT

It's clearly time for Plan V. The Business Secretary has been banging the drum for new infrastructure spending for some time now, and will be rewarded by an announcement of an additional spend of £3bn a year in June's Spending Review, the Times (£) reports. The money will back some crowd pleasing measures, not least a new toll road south of Newport. The route, intended to relieve congestion on the M4 which runs above the city, will be completed in 2031 and will cost £830m with the Government acting as a guarantor of loans taken by construction firms. In addition, plans are also being devised to improve the A1 near Berwick-Upon-Tweed, the A47 in Norfolk, and the A303 near Stonehenge. Our generation's Hoover Dams have certainly impressed the paper's leader:

"Infrastructure spending is not expedient for a boost in short-term demand and will not in any case have that effect. nIts purpose is to make the economy work better for the long term. The model of charging for new roads is, moreover, good economics that should be extended."

FRANCE AND GERMANY REJECT EU REVIEW

When Dave gave his EU speech earlier this year, the emphasis was on reform in partnership with other member states. The British unilateral renegotiation was intended as a last resort. Unfortunately, France and Germany are not playing ball. A report in the FT (£) this morning indicates that Paris and Berlin have rejected an invitation from the Foreign Office to participate in a "balance of competences" study examining which powers ought to flow back from Brussels. A French diplomat tells the paper that this is a "British domestic political exercise". Fair to say we're a little way from a grand alliance at the moment, then.

TORIES BRACED FOR COUNCIL CHAOS

Grant Shapps expects the Conservatives to lose around 500 seats in May's English (and one Welsh) council elections, the Guardian reports. The situation is not helped by the fact that the party are defending one of their most succesful local government campaigns post-war. In 2009, they polled 44pc of the vote to Labour's 13pc, as the latter were mired in the midst of the banking collapse. That said, the seats are in true blue terrain (Buckinghamshire, for instance, has been in Tory hands for a century), and Labour is anticipating only a more modest 200 seat gain. CCHQ would be delighted with that. As one Cabinet minister tells the paper, "terrible will be a great result for us".

BURNHAM BACKS RESTRICTIONS ON HEALTH TOURISM

Andy Burnham's interview with the forthcoming Fabian Review is reproduced in today's Telegraph. It tells the sad story behind his grandmother's engagement ring which had been stolen while she was under NHS care, it also reveals plenty of common ground with Jeremy Hunt. Mr Burnham says he "take[s] a pretty tough line" on migrant's access to healthcare, with the exception of emergency treatment, and adds that he found the fact that the benefits system allows the repatriation of child benefit paid to immigrants with children who live abroad "indefensible on the doorstep" at the last election. "We've got to move away from saying that it's too hard to change" on benefits, he adds. Mr Burnham goes on to talk about his failed campaign for the Labour leadership. Continue in this vein and he will have a decent shot at the Tory top job.

GRAYLING INVITES LABOUR TO JOIN FORCES OVER QATADA

With the Lib Dems vowing to fight even a modest change to Britain's human rights laws, Chris Grayling has reached out to Labour to "join forces" to ensure the extradition of Abu Qatada in an article in the Mail. Arguing that a man who "so obviously despises what we stand for" should not be saved from deportation by human rights laws, Mr Grayling invites Labour to back a Tory legislative initiative to amend the Human Rights Act. Ball in your court, Ed.

BLOW FOR SALMOND AS MURDOCH BACKS UNION

It may be the Scottish Sun wot loses it for Alex Salmond. TheIndependent reports that Rupert Murdoch's Scottish titles will not back a yes vote on independence despite his close relationship with the SNP leader who he has described as "the most brilliant politician in the UK". Brilliant, maybe, but clearly still not good enough.

MURPHY RECONSIDERS BALLS ON HIS BACK

Good news, sports fans. Ed Balls will compete in the London Marathon this year, attempting to beat last year's time of five hours 31 minutes. AsEphraim Hardcastle reports, Jim Murphy, who had said that he could beat Ed's time last year with "Balls on my back" may not now be able to carry him, as he has suffered a double leg injury while training for the event.

CAMERON'S EWE TURN WINS PRAISE

How's this for an endorsement? "I can't imagine any other Prime Minister doing something like that. David Cameron was soaking wet and covered in mud." Julian Tustian is referring, of course, to Dave's courageous rescue of a drowning sheep near Chipping Norton. The animal's owner tells the Sun, "he seems quite fond of sheep. I do think he could be a farmer and hold his own with a flock of sheep." If herding cats in the Commons doesn't work out...